The CMA is the national voice of Canadian physicians. On behalf of its more than 83,000 members and the Canadian public, the CMA’s mission is helping physicians care for patients. In fulfillment of this mission, the CMA’s role is focused on national, pan-Canadian health advocacy and policy priorities.
As detailed in this brief, the CMA is gravely concerned that by capturing group medical structures in the application of Section 44 of Bill C-29, the federal government will inadvertently negatively affect medical research, medical training and education as well as access to care.
To ensure that the unintended consequences of this federal tax policy change do not occur, the CMA is strongly recommending that the federal government exempt group medical and health care delivery from the proposed changes to s.125 of the Income Tax Act regarding multiplication of access to the small business deduction in Section 44 of Bill C-29.
Relevance of the Canadian Controlled Private Corporation Framework to Medical Practice
Canada’s physicians are highly skilled professionals, providing an important public service and making a significant contribution to our country’s knowledge economy. Due to the design of Canada’s health care system, a large majority of physicians – more than 90% – are self-employed professionals and effectively small business owners.
As self-employed small business owners, physicians typically do not have access to pensions or health benefits, although they are responsible for these benefits for their employees. Access to the Canadian-Controlled Private Corporation (CCPC) framework and the Small Business Deduction (SBD) are integral to managing a medical practice in Canada. It is imperative to recognize that physicians cannot pass on any increased costs, such as changes to CCPC framework and access to the SBD, onto patients, as other businesses would do with clients.
In light of the unique business perspectives of medical practice, the CMA strongly welcomed the Finance Committee’s recommendation to maintain the existing small business framework and the subsequent federal recognition in the 2016 budget of the value that health care professionals deliver to communities across Canada as small business operators. Contrary to this recognition, the 2016 budget also introduced a proposal to alter eligibility to the small business deduction that will impact physicians incorporated in group medical structures.
What’s at risk: Contribution of group medical structures to health care delivery
The CMA estimates that approximately 10,000 to 15,000 physicians will be affected by this federal taxation proposal. If implemented, this federal taxation measure will negatively affect group medical structures in communities across Canada. By capturing group medical structures, this proposal also introduces an inequity amongst incorporated physicians, and incentivizes solo practice, which counters provincial and territorial health delivery priorities.
Group medical structures are prevalent within academic health science centres and amongst certain specialties, notably oncology, anaesthesiology, radiology, and cardiology. Specialist care has become increasingly sub-specialized. For many specialties, it is now standard practice for this care to be provided by teams composed of numerous specialists, sub-specialists and allied health care providers. Team-based care is essential for educating and training medical students and residents in teaching hospitals, and for conducting medical research.
Put simply, group medical structures have not been formed for taxation or commercial purposes. Rather, group medical structures were formed to deliver provincial and territorial health priorities, primarily in the academic health setting, such as teaching, medical research as well as optimizing the delivery of patient care. Over many years, and even decades, provincial and territorial governments have been supporting and encouraging the delivery of care through team-based models.
To be clear, group medical structures were formed to meet health sector priorities; they were not formed for business purposes. It is equally important to recognize that group medical structures differ in purpose and function from similar corporate or partnership structures seen in other professions. Unlike most other professionals, physicians do not form these structures for the purpose of enhancing their ability to earn profit.
It is critical that the federal government acknowledge that altering eligibility to the small business deduction will have more significant taxation implication than simply the 4.5% difference in the small business versus general rate at the federal level. It would be disingenuous to argue that removing full access to the small business deduction for incorporated physicians in group medical structures will be a minor taxation increase. As demonstrated below in Table 1, the effect of this federal taxation change will vary by province.
Table 1: Taxation impacts by province, if the federal taxation proposal is implemented
In Nova Scotia, for example, approximately 60% of specialist physicians practice in group medical structures. If the federal government applies this taxation proposal to group medical structures, these physicians will face an immediate 17.5% increase in taxation. In doing so, the federal government will establish a strong incentive for these physicians to move away from team-based practice to solo practice. If this comes to pass, the federal government may be responsible for triggering a reorganization of medical practice in Nova Scotia.
Finance Canada Grossly Underestimating the Net Impact
The CMA is aware that Finance Canada has developed theoretical scenarios that demonstrate a minimal impact to incorporated physicians within group medical structures. Working closely with our subsidiary, MD Financial Management, the CMA submitted real financial scenarios from real financial information provided to the CMA from incorporated physicians in group medical structures. These real examples demonstrate that there will be a significant impact to incorporated physicians in group medical structures, if this federal tax proposal will apply to them.
The theoretical scenarios developed by Finance Canada conclude the net financial impact to an incorporated physician in a group medical structure would be in the magnitude of hundreds of dollars. In stark contrast to the theoretical scenarios developed by Finance Canada, the CMA submitted financial scenarios of two incorporated physicians in group medical structures. The financial calculations undertaken by the CMA is based on the real financial information of these two physicians. The examples revealed yearly net reduction of funds of $32,510 and $18,065 for each of these physicians respectively.
Projecting forward, for the first physician, this would represent a negative impact of $402,330 based on a 20-year timeframe and 4.8% rate of return1. Extending the same assumptions to all incorporated members of that physician’s group medical structure, the long-term impact for the group would be $39.4 million.2
1 Source: MD Financial Management
2 Please note that these projections have not been adjusted for the inherent tax liability on the growth.
3 Source: MD Financial Management
4 Please note that these projections have not been adjusted for the inherent tax liability on the growth.
For the second physician, projecting forward, this would represent a negative impact of $223,565, based on a 20-year timeframe and 4.8% rate of return3. Extending the same assumptions to all incorporated members of that physician’s group medical structure, the long-term impact for the group would be $13.4 million.4
Unprecedented Level of Concern Expressed by Physicians
Following the publication of the 2016 federal budget, the CMA received a significant volume of correspondence from its membership expressing deep concern with the proposal to alter access to the small business deduction for group medical structures. The level of correspondence from our membership is quite simply unprecedented in our almost 150 year history.
As part of the CMA’s due diligence as the national professional organization representing physicians, we informed our membership of Finance Canada’s consultation process on the draft legislative measures. In response, the CMA was copied on submissions by over 1,300 physicians to Finance Canada’s pre-legislative consultation.
In follow up, the CMA surveyed these physicians to better understand the impacts of the budget proposal. Here’s what we heard:
. Most respondents (61%) indicated that their group structure would dissolve;
. Most respondents (54%) said they would stop practicing in their group structure and that other partners would leave (76%);
. A large majority (78%) indicated that the tax proposal would lead to reduced investments in medical research by their group;
. Almost 70% indicated that the tax proposal would limit their ability to provide medical training spots; and,
. Another 70% indicated that the tax proposal will mean reduced specialty care by their group.
The full summary of the survey is provided as an appendix to this brief.
To further illustrate the risks of this proposal to health care, below are excerpts from some of the communiques received by the CMA from its membership:
. “Our Partnership was formed in the 1970s…The mission of the Partnership is to achieve excellence in patient care, education and research activities….there would be a serious adverse effect on retention and recruitment if members do not have access to the full small business deduction…The changes will likely result in pressure to dissolve the partnership and revert to the era of departments services by independent contractors with competing individual financial interests.” Submitted to the CMA April 15, 2016 from a member of the Anesthesia Associates of the Ottawa Hospital General Campus
. “The University of Ottawa Heart Institute is an academic health care institution dedicated to patient care, research and medical education…To support what we call our “academic mission,” cardiologists at the institute have formed an academic partnership…If these [taxation] changes go forward they will crippled the ability of groups such as ours to continue to function and will have a dramatic negative impact on medical education, innovative health care research, and the provision of high-quality patient care to our sickest patients.” Submitted to the CMA April 19, 2016 from a member of the Associates in Cardiology
. “We are a general partnership consisting of 93 partners all of whom are academic anesthesiologists with appointments to the Faculty of the University of Toronto and with clinical appointments at the University Health Network, Sinai Health System or Women’s College Hospital…In contrast to traditional business partnerships, we glean no business advantage whatsoever from being in a partnership…the proposed legislation in Budget 2016 seems unfair in that it will add another financial hardship to our partners – in our view, this is a regressive tax on research, teaching and innovation.” Submitted to the CMA April 14, 2016 from members of the UHN-MSH Anesthesia Associates
The CMA recommends that the federal government exempt group medical and health care delivery from the proposed changes to s.125 of the Income Tax Act regarding multiplication of access to the small business deduction, as proposed in Section 44 of Bill C-29, Budget Implementation Act, 2016, No. 2.
Below is a proposed legislative amendment to ensure group medical structures are exempted from Section 44 of Bill C-29, Budget Implementation Act, 2016, No. 2:
Section 125 of the Act is amended by adding the following after proposed subsection 125(9):
125(10) Interpretation of designated member – [group medical partnership] – For purposes of this section, in determining whether a Canadian-controlled private corporation controlled directly or indirectly in any manner whatever by one or more physicians or a person that does not deal at arm's length with a physician is a designated member of a particular partnership in a taxation year, the term "particular partnership" shall not include any partnership that is a group medical partnership.
125(11) Interpretation of specified corporate income – [group medical corporation] – For purposes of this section, in determining the specified corporate income for a taxation year of a corporation controlled directly or indirectly in any manner whatever by one or more physicians or a person that does not deal at arm's length with a physician, the term "private corporation" shall not include a group medical corporation.
Subsection 125(7) of the Act is amended by adding the following in alphabetical order:
"group medical partnership" means a partnership that:
(a) is controlled, directly or indirectly in any manner whatever, by one or more physicians or a person that does not deal at arm's length with a physician; and
(b) earns all or substantially all of its income for the year from an active business of providing services or property to, or in relation to, a medical practice;
"group medical corporation" means a corporation that:
(a) is controlled, directly or indirectly in any manner whatever, by one or more physicians or a person that does not deal at arm's length with a physician; and
(b) earns all or substantially all of its income for the year from an active business of providing services or property to, or in relation to, a medical practice.
"medical practice" means any practice and authorized acts of a physician as defined in provincial or territorial legislation or regulations and any activities in relation to, or incidental to, such practice and authorized acts;
"physician" means a health care practitioner duly licensed with a provincial or territorial medical regulatory authority and actively engaged in practice;
Incorporation Survey, October 2016
*Totals may exceed 100% as respondents were allowed to select more than one response
% Distribution by Province of Practice
Academic health sciences centre
Private office / clinic
Emergency department (in community hospital or AHSC)
Community clinic/Community health centre
Non-AHSC teaching hospital
Free-standing lab/diagnostic clinic
Free-standing walk-in clinic
Nursing home/ Long term care facility / Seniors' residence
Administrative office / Corporate office
% Distribution by Work Setting
Most frequently mentioned hospitals where respondents work in group medical structures
Group medical structure will dissolve
Stop practice in your group medical structure
Partnering members leave the group medical
Reduced investments in medical research
Reduced medical training spots
Reduced provision of specialized care
Physicians perceptions about the likelihood of the following outcomes
Likely or very likely
Unlikely or very unlikely
The federal government is advancing a tax proposal that will alter access to the small business deduction. If implemented, this proposal will affect incorporated physicians practicing in partnership group medical structures. The Canadian Medical Association (CMA) is actively advocating for the federal government to exempt group medical structures from the application of this tax proposal.
Importance of Exempting Group Medical Structures from the Tax Proposal
Important or very important
Unimportant or very unimportant
To support the effectiveness of its advocacy efforts, the CMA conducted an online survey seeking input from members who had voiced their concerns about this issue directly with the Department of Finance and who had copied the CMA on their submissions.
Sample: physician type, province, and work setting
The survey was sent to 1089 CMA members, of which 174 responded (15.9% response rate). All sample respondents were incorporated and practiced in a group medical structure; 26% were family physicians (N=45) and 74% were specialists (N=129). Most respondents indicated practicing primarily in Ontario (65%) and Alberta (13%).
With respect to practice settings, the majority reported working in an academic health sciences centre (65%), followed by a private office/clinic (28%), university (22%), community hospital (15%), emergency department (9%), community clinic/community
health centre (8%), non-AHSC teaching hospital (8%), research unit (6%), and free-standing lab/diagnostic clinic (6%).
In total, respondents worked in 79 hospitals spread around 36 cities.
Likelihood of outcomes resulting from the federal tax proposal
When asked about the possible consequences of the proposed changes, the largest share of respondents (78%) felt a reduction in investments in medical research was likely or very likely. Almost as many (76%) also felt that partnering members would likely leave the group medical structure.
. Most respondents (61%) indicated that their group medical structure would be likely or very likely to dissolve if the federal tax proposal to change access to the small business deduction was implemented. Less than one-third (30%) felt unsure while only a few (9%) reported it as unlikely or very unlikely.
. More than half of respondents (54%) indicated that they would be likely or very likely to stop practicing in their group medical structure if the tax proposal was implemented. More than one-third (36%) were unsure while only a few (10%) reported it as unlikely or very unlikely.
. More than three-quarters of respondents (76%) indicated that other partnering members would be likely or very likely to leave their group medical structure if the tax proposal was implemented. About 20% remained unsure while only 5% reported it as unlikely or very unlikely.
. Almost 8 in 10 respondents (78%) indicated that implementing the tax proposal would be likely or very likely to reduce investments in medical research for their group medical structure. 16% remained unsure while 6% reported it as unlikely or very unlikely.
. Approximately two-thirds of respondents (67%) indicated that implementing the tax proposal would be likely or very likely to reduce the ability of the group medical structure to provide medical training spots. About a quarter (23%) remained unsure and 1 in 10 reported it as unlikely or very unlikely.
. Almost 7 in 10 respondents (68%) indicated that implementing the tax proposal would be likely or very likely to reduce provision of specialized care by their group medical structure. Almost a quarter (24%) remained unsure while 8% reported it as unlikely or very unlikely.
Importance of exempting group medical structures from the tax proposal
More than 9 in 10 respondents (94%) felt that it is important or very important for the federal government to exempt group medical structures from the tax proposal to avoid negatively affecting health care delivery in their province. The remaining respondents were unsure (2%) or considered it unimportant or very unimportant (4%).
Other Impacts – Write-in Question
Before submitting the survey, respondents were given the chance to provide additional comments about other potential impacts that the proposed changes might produce. Most responses touched upon a few and inter-related themes, including:
1. Impact on education and research will be detrimental and will eventually affect patient care:
o “Without the group medical structure, we cannot adequately support teaching education and research activities. Physicians in academic health sciences centres will be forced to use their time to see patients, in order to bill fee-for-service to make a living. Very little time will be left over to
spend doing the research that is critical to advancing medical science, to supporting our university, and our nation’s prominent place in the world of medicine”
o “Support is given to the academic health sciences centres by the provincial government in order to facilitate research and education. The federal government's changes will penalize physicians who already dedicate much of their time to providing the stepping stones to advance medicine forward. These physicians generally make less income than physicians working in private practice. They are willing to take this monetary hit because they love what they do. However we all need to support our families and put food on the table. With the government's changes, this may not be possible in the current system, and these group medical structures will need to be dissolved and the physicians working will have much less time to dedicate to research and education.”
o “Less education, research activity to focus on fee-for-service procedures to compensate for higher taxes.”
o Our ability to provide teaching for medical education and research, which are currently not remunerated, would be curtailed. There would be no incentive but rather a significant disincentive to provide these activities because we would be financially penalized compared to physicians in the same specialty that are not in group medical structures.”
o “As the main teaching practice structure, we will lose full time faculty who provide the backbone to the program. They currently earn much below the average for Family Physicians in the province and our ability to support education and research will be compromised.”
2. Discourages practice in academic centres:
o “Working in an academic center as a general pediatrician means that we already make substantially less money than our community colleagues. There is very little incentive to remain in academic practice if we not only earn less, but are then not entitled to the same tax savings. I would leave academic practice and I suspect many of my colleagues would as well. I think we could see the end of the current group medical structure, as it would no longer support a financially viable model for academic practice.”
o “Creates a further divide between working in an academic centre and in the community. It will continue to be more advantageous to work in a smaller community - more money, less cost of living, less administrative and academic hassles, less research funding. Why bother working at an academic centre with such disadvantages.”
o “This policy seems to target academic physicians in groups disproportionately. These physicians currently support research and education by reallocating our own funds generated from clinical care. It is puzzling as to why the Federal Government is waging this war on the academic physician workforce.”
3. Physician retention and recruitment will be challenging:
o “I will retire sooner than otherwise.”
o “At the present time it is very difficult to recruit family doctors who are interested in teaching, research and administration of academic family medicine. This tax change will make it increasingly more difficult to recruit such individuals.”
o “I'm concerned that the proposed changes erase any benefits from a corporation structure and leave me with a loss. Work is so stressful and demanding that if I find myself in a disadvantaged situation financially as well, this would be another factor encouraging me either to retire or move outside of Canada. If I'm going to be faced with losses and more stress, why not instead focus on my quality of life instead?”
o “It would severely restrict our ability to recruit research and specialty physicians. We would not be able to compete with community centres and would see a dramatic decline in our ability to provide for teaching and research activities now funded through the group structure.”
o “I am a dual citizen and would seriously entertain moving to the USA.”
o “It will basically force me to go to a free standing walk in clinic.”
o “It would be less likely to recruit the best quality of medical staff to academic practice as there will be a significant financial disincentive, especially compared to what that same individual could earn on their own
in a community practice. This is on top of the fact that academic practitioners tend to earn less to start with.”
4. Discourages team-based collaborative care:
o “The bill sets up an unfair system where it is more attractive to be a solo MD rather than to collaborate and be part of a team.”
o “This creates an every person for themselves philosophy.”
o “The provision of our group services is required to ensure best patient care. It is wrong to penalize this model of comprehensive care.”
5. Practice will close and services will be limited in certain areas:
o “Any reduction in research, administration, academic activity, and members would affect patient care at our facility and therefore be a threat to patient safety. e.g., if multiple physicians leave, then we won't have enough physicians to cover the emergency department appropriately, wait times will increase, and serious patient safety concerns will arise.”
o “Reduces productivity of the doctors concerned and hence quality of service provided. Access will also be affected!”
o This would be unattractive for some, and they may leave (or others may not join.) If partners leave, the overhead will go up and we would likely close. Because our overhead is already borderline unacceptable. Shared between fewer docs would make it economically impossible. And this could easily happen if docs leave.
o “Reduced physician coverage if members opt out of group medical structure, which would have an impact on greater access and the quality of care.”
o “Our ability to have a large interdisciplinary team to assist in serving our patients could not continue to exist. Our ability to continue to provide 24/7 on-call and after hours clinics would decrease due to a change in the structure leading to less practitioners.”
The Canadian Medical Association (CMA) is pleased to confirm its strong support for the federal government's health and social policy commitments, as identified in the ministerial mandate letters.
In this brief, the CMA outlines seven recommendations for meaningful and essential federal action to ensure Canada is prepared to meet the health care needs of its aging population. The CMA's recommendations are designed to be implemented in the 2016-17 fiscal year in order to deliver immediate support to the provinces and territories and directly to Canadians.
Immediate implementation of these recommendations is essential given the current and increasing shortages being experienced across the continuum of care in jurisdictions across Canada. In 2014, the CMA initiated a broad consultative initiative on the challenges in seniors care, as summarized in the report A Policy Framework to Guide a National Seniors Strategy for Canada. This report highlights the significant challenges currently being experienced in seniors care and emphasizes the need for increased federal engagement.
Finally, if implemented, the CMA's recommendations will contribute to the federal government's strategic commitments in health, notably the commitment to the development of a new Health Accord.
1) Demographic Imperative for Increased Federal Engagement in Health
Canada is a nation on the threshold of great change. This change will be driven primarily by the economic and social implications of the major demographic shift already underway. The added uncertainties of the global economy only emphasize the imperative for federal action and leadership.
In 2015, for the first time in Canada's history, persons aged 65 years and older outnumbered those under the age of 15 years.1 Seniors are projected to represent over 20% of the population by 2024 and up to 25% of the population by 2036.2
It is increasingly being recognized that the projected surge in demand for services for seniors that will coincide with slower economic growth and lower government revenue will add pressure to the budgets of provincial and territorial governments.3 Today, while seniors account for about one-sixth of the population, they consume approximately half of public health spending.4 Based on current trends and approaches, seniors care is forecast to consume almost 62% of provincial/territorial health budgets by 2036.5
The latest National Health Expenditures report by the Canadian Institute of Health Information (CIHI) projects that health spending in 2015 was to exceed $219 billion, or 10.9% of Canada's gross domestic product (GDP).6 To better understand the significance of health spending in the national context, consider that total federal program spending is 13.4% of GDP.7 Finally, health budgets are now averaging 38% of provincial and territorial global budgets.8 Alarmingly, the latest fiscal sustainability report of the Parliamentary Budget Officer explains that the demands of Canada's aging population will result in "steadily deteriorating finances" for the provinces and territories, who "cannot meet the challenges of population aging under current policy."9
Taken together, the indicators summarized above establish a clear imperative and national interest for greater federal engagement, leadership and support for the provision of health care in Canada.
2) Responses to Pre-Budget Consultation Questions
Question 1: How can we better support our middle class?
A) Federal Action to Help Reduce the Cost of Prescription Medication
The CMA strongly encourages the federal government to support measures aimed at reducing the cost of prescription medication in Canada. A key initiative underway is the pan-Canadian Pharmaceutical Alliance led by the provinces and territories. The CMA supports the federal government's recent announcement that it will partner with the provinces and territories as part of the pan-Canadian Pharmaceutical Alliance. In light of the fact that the majority of working age Canadians have coverage for prescription medication through private insurers10, the CMA recommends that the federal government support inviting the private health insurance industry to participate in the work of the pan-Canadian Pharmaceutical Alliance.
Prescription medication has a critical role as part of a high-quality, patient-centred and cost-effective health care system. Canada stands out as the only country with universal health care without universal pharmaceutical coverage.11 It is an unfortunate reality that the affordability of prescription medication has emerged as a key barrier to access to care for many Canadians.
According to the Angus Reid Institute, more than one in five Canadians (23%) report that they or someone in their household did not take medication as prescribed because of the cost during the past 12 months.12 Statistics Canada's Survey of Household Spending reveals that households headed by a senior spend $724 per year on prescription medications, the highest among all age groups and over 60% more than the average household.13 Another recent study found that 7% of Canadian seniors reported skipping medication or not filling a prescription because of the cost.14
The CMA has long called on the federal government to implement a system of catastrophic coverage for prescription medication to ensure Canadians do not experience undue financial harm and to reduce the cost barriers of treatment. As a positive step toward comprehensive, universal coverage for prescription medication, the CMA recommends that the federal government establish a new funding program for catastrophic coverage of prescription medication. The program would cover prescription medication costs above $1,500 or 3% of gross household income on an annual basis. Research commissioned by the CMA estimates this would cost $1.57 billion in 2016-17 (Table 1).
Table 1: Projected cost of federal contribution to cover catastrophic prescription medication costs, by age cohort, 2016-2020 ($ million)15
Share of total cost
Under 35 years
35 to 44 years
45 to 54 years
55 to 64 years
65 to 74 years
75 years +
B) Deliver Immediate Federal Support to Canada's Unpaid Caregivers
There are approximately 8.1 million Canadians serving as informal, unpaid caregivers with a critical role in Canada's health and social sector.16 The Conference Board of Canada reports that in 2007, informal caregivers contributed over 1.5 billion hours of home care - more than 10 times the number of paid hours in the same year.17 The economic contribution of informal caregivers was estimated to be about $25 billion in 2009.18 This same study estimated that informal caregivers incurred over $80 million in out-of-pocket expenses related to caregiving in 2009.
Despite their tremendous value and important role, only a small fraction of caregivers caring for a parent receive any form of government support.19 Only 5% of caregivers providing care to parents reported receiving financial assistance, while 28% reported needing more assistance than they received.20
It is clear that Canadian caregivers require more support. As a first step, the CMA recommends that the federal government amend the Caregiver and Family Caregiver Tax Credits to make them refundable. This would provide an increased amount of financial support for family caregivers. It is estimated that this measure would cost $90.8 million in 2016-17.21
C) Implement a new Home Care Innovation Fund
The CMA strongly supports the federal government's significant commitment to deliver more and better home care services, as released in the mandate letter for the Minister of Health.
Accessible, integrated home care has an important role in Canada's health sector, including addressing alternate level of care (ALC) patients waiting in hospital for home care or long-term care. As highlighted by CIHI, the majority of the almost 1 million Canadians receiving home care are aged 65 or older.22 As population aging progresses, demand for home care can be expected to increase.
Despite its importance, it is widely recognized that there are shortages across the home care sector.23 While there are innovations occurring in the sector, financing is a key barrier to scaling up and expanding services. To deliver the federal government's commitment to increasing the availability of home care, the CMA recommends the establishment of a new targeted home care innovation fund. As outlined in the Liberal Party of Canada's election platform, the CMA recommends that the fund deliver $3 billion over four years, including $400 million in the 2016-17 fiscal year.
Question 2: What infrastructure needs can best help grow the economy...and meet your priorities locally?
Deliver Federal Investment to the Long-term Care Sector as part of Social Infrastructure
All jurisdictions across Canada are facing shortages in the continuing care sector. Despite the increased availability of home care, research commissioned for the CMA indicates that demand for continuing care facilities will surge as the demographic shift progresses.24
In 2012, it was reported that wait times for access to a long-term care facility in Canada ranged from 27 to over 230 days. More than 50% of ALC patients are in these hospital beds because of the lack of availability of long-term care beds25. Due to the significant difference in the cost of hospital care (approximately $846 per day) versus long-term care ($126 per day), the CMA estimates that the shortages in the long-term care sector represent an inefficiency cost to the health care system of $2.3 billion a year.26
Despite the recognized need for infrastructure investment in the continuing care sector, to date, this sector has been unduly excluded from federal investment in infrastructure, namely the Building Canada Plan. The CMA recommends that the federal government include capital investment in continuing care infrastructure, including retrofit and renovation, as part of its commitment to invest in social infrastructure. Based on previous estimates, the CMA recommends that $540 million be allocated for 2016-17 (Table 2), if implemented on a cost-share basis.
Table 2: Estimated cost to address forecasted shortage in long-term care beds, 2016-20 ($ million)27
Forecasted shortage in long term care beds
Estimated cost to address shortage
Federal share to address shortage in long term care beds (based on 1/3 contribution)
In addition to improved delivery of health care resources, capital investment in the long-term care sector would provide an important contribution to economic growth. According to previous estimates by the Conference Board of Canada, the capital investment needed to meet the gaps from 2013 to 2047 would yield direct economic benefits on an annual basis that include $1.23 billion contribution to GDP and 14,141 high value jobs during the capital investment phase and $637 million contribution to GDP and 11,604 high value jobs during the facility operation phase (based on an average annual capital investment).
Question 3: How can we create economic growth, protect the environment, and meet local priorities while ensuring that the most vulnerable don't get left behind?
Deliver new Funding to Support the Provinces and Territories in Meeting Seniors Care Needs
Canada's provincial and territorial leaders are struggling to meet health care needs in light of the demographic shift. This past July, the premiers issued a statement calling for the federal government to increase the Canada Health Transfer (CHT) to 25% of provincial and territorial health care costs to address the needs of an aging population.
It is recognized that as an equal per-capita based transfer, the CHT does not currently account for population segments with increased health needs, specifically seniors. The CMA was pleased that this issue was recognized by the Prime Minister in his letter last spring to Quebec Premier Philippe Couillard.
However, the CMA is concerned that an approach to modify the transfer formula would potentially delay the delivery of federal support to meet the needs of an aging population. As such, rather than the transfer formula, the CMA has developed an approach that delivers support to jurisdictions endeavoring to meet the needs of their aging populations while respecting the transfer arrangement already in place.
The CMA commissioned the Conference Board of Canada to calculate the amount for the top-up to the CHT using a needs-based projection. The amount of the top-up for each jurisdiction is based on the projected increase in health care spending associated with an aging population.
To support the innovation and transformation needed to address the health needs of the aging population, the CMA recommends that the federal government deliver additional funding on an annual basis beginning in 2016-17 to the provinces and territories by means of a demographic-based top-up to the Canada Health Transfer (Table 3). For the fiscal year 2016-17, this top-up would require $1.6 billion in federal investment.
Table 3: Allocation of the federal demographic-based top-up, 2016-20 ($million)28
All of Canada
Newfoundland and Labrador
Prince Edward Island
Question 4: Are the Government's new priorities and initiatives realistic; will they help grow the economy?
Ensure Tax Equity for Canada's Medical Professionals is Maintained
Among the federal government's commitments is the objective to decrease the small business tax rate from 11% to 9%. The CMA supports this commitment to support small businesses, such as medical practices, in recognition of the significant challenges facing this sector. However, it is not clear whether as part of this commitment the federal government intends to alter the Canadian-Controlled Private Corporation (CCPC) framework. The federal government's framing of this commitment, as released in the mandate letter for the Minister of Small Business and Tourism, has led to confusion and concern.
Canada's physicians are highly skilled professionals, providing an important public service and making a significant contribution to our country's knowledge economy. Canadian physicians are directly or indirectly responsible for hundreds of thousands of jobs across the country, and invest millions of dollars in local communities, ensuring that Canadians are able to access the care they need, as close to their homes as possible.
In light of the design of Canada's health care system, the majority of physicians are self-employed professionals and effectively small business owners. As self-employed small business owners, they typically do not have access to pensions or health benefits. In addition, as employers, they are responsible for these benefits for their employees.
In addition to managing the many costs associated with running a medical practice, Canadian physicians must manage challenges not faced by many other small businesses. As highly-skilled professionals, physicians typically enter the workforce with significant debt levels and at a later stage in life. For some, entering practice after training requires significant investment in a clinic or a practice.
Finally, it is important to recognize that physicians cannot pass on the increased costs introduced by governments, such as changes to the CCPC framework, onto patients, as other businesses would do with clients.
For a significant proportion of Canada's physicians, the CCPC framework represents a measure of tax equity for individuals taking on significant personal financial burden and liability as part of our public health care system. As well, in many cases, practices would not make economic sense if the provisions of the CCPC regime were not in place. Given the importance of the CCPC framework to medical practice, changes to this framework have the potential to yield unintended consequences in health resources, including the possibility of reduced access to much needed care.
The CMA recommends that the federal government maintain tax equity for medical professionals by affirming its commitment to the existing framework governing Canadian-Controlled Private Corporations.
The CMA recognizes that the federal government must grapple with an uncertain economic forecast and is prioritizing measures that will support economic growth. The CMA strongly encourages the federal government to adopt the seven recommendations outlined in this submission as part of these efforts. In addition to making a meaningful contribution to meeting the future care needs of Canada's aging population, these recommendations will mitigate the impacts of economic pressures on individuals as well as jurisdictions. The CMA would welcome the opportunity to provide further information and its rationale for each recommendation.
Summary of Recommendations
1. The CMA recommends that the federal government establish a new funding program for catastrophic coverage of prescription medication; this would be a positive step toward comprehensive, universal coverage for prescription medication.
2. The CMA recommends that the federal government support inviting the private health insurance industry to participate in the work of the pan-Canadian Pharmaceutical Alliance.
3. The CMA recommends that the federal government amend the Caregiver and Family Caregiver Tax Credits to make them refundable.
4. To deliver the federal government's commitment to increasing the availability of home care, the CMA recommends the establishment of a new targeted home care innovation fund.
5. The CMA recommends that the federal government include capital investment in continuing care infrastructure, including retrofit and renovation, as part of its commitment to invest in social infrastructure.
6. The CMA recommends that the federal government deliver additional funding on an annual basis beginning in 2016-17 to the provinces and territories by means of a demographic-based top-up to the Canada Health Transfer.
7. The CMA recommends that the federal government maintain tax equity for medical professionals by affirming its commitment to the existing framework governing Canadian-Controlled Private Corporations.
1 Statistics Canada. Population projections: Canada, the provinces and territories, 2013 to 2063. The Daily, Wednesday, September 17, 2014. Available: http://www.statcan.gc.ca/daily-quotidien/140917/dq140917a-eng.htm
2 Statistics Canada. Canada year book 2012, seniors. Available: www.statcan.gc.ca/pub/11-402-x/2012000/chap/seniors-aines/seniors-aines-eng.htm
3 Conference Board of Canada. A difficult road ahead: Canada's economic and fiscal prospects. Available: http://canadaspremiers.ca/phocadownload/publications/conf_bd_difficultroadahead_aug_2014.pdf.
4 Canadian Institute for Health Information. National health expenditure trends, 1975 to 2014. Ottawa: The Institute; 2014. Available: www.cihi.ca/web/resource/en/nhex_2014_report_en.pdf
5 Calculation by the Canadian Medical Association, based on Statistics Canada's M1 population projection and the Canadian Institute for Health Information age-sex profile of provincial-territorial health spending.
6 CIHI. National Health Expenditure Trends,1975 to 2015. Available: https://secure.cihi.ca/free_products/nhex_trends_narrative_report_2015_en.pdf.
7 Finance Canada. Update of Economic and Fiscal Projections 2015. http://www.budget.gc.ca/efp-peb/2015/pub/efp-peb-15-en.pdf.
8 CIHI. National Health Expenditure Trends,1975 to 2015. Available: https://secure.cihi.ca/free_products/nhex_trends_narrative_report_2015_en.pdf.
9 Office of the Parliamentary Budget Officer. Fiscal sustainability report 2015. Ottawa: The Office; 2015. Available: www.pbo-dpb.gc.ca/files/files/FSR_2015_EN.pdf
10 IBM for the Pan-Canadian Pharmaceutical Alliance. Pan Canadian Drugs Negotiations Report. Available at: http://canadaspremiers.ca/phocadownload/pcpa/pan_canadian_drugs_negotiations_report_march22_2014.pdf .
11 Morgan SG, Martin D, Gagnon MA, Mintzes B, Daw JR, Lexchin J. Pharmacare 2020: The future of drug coverage in Canada. Vancouver: Pharmaceutical Policy Research Collaboration, University of British Columbia; 2015. Available: http://pharmacare2020.ca/assets/pdf/The_Future_of_Drug_Coverage_in_Canada.pdf
12 Angus Reid Institute. Prescription drug access and affordability an issue for nearly a quarter of Canadian households. Available: http://angusreid.org/wp-content/uploads/2015/07/2015.07.09-Pharma.pdf
13 Statistics Canada. Survey of household spending. Ottawa: Statistics Canada; 2013.
14 Canadian Institute for Health Information. How Canada compares: results From The Commonwealth Fund 2014 International Health Policy Survey of Older Adults. Available: www.cihi.ca/en/health-system-performance/performance-reporting/international/commonwealth-survey-2014
15 Conference Board of Canada. Research commissioned for the CMA, July 2015.
16 Statistics Canada. Family caregivers: What are the consequences? Available: www.statcan.gc.ca/pub/75-006-x/2013001/article/11858-eng.htm
17 Conference Board of Canada. Home and community care in Canada: an economic footprint. Ottawa: The Board; 2012. Available: http://www.conferenceboard.ca/cashc/research/2012/homecommunitycare.aspx
18 Hollander MJ, Liu G, Chappeel NL. Who cares and how much? The imputed economic contribution to the Canadian health care system of middle aged and older unpaid caregivers providing care to the elderly. Healthc Q. 2009;12(2):42-59.
19 Government of Canada. Report from the Employer Panel for Caregivers: when work and caregiving collide, how employers can support their employees who are caregivers. Available: www.esdc.gc.ca/eng/seniors/reports/cec.shtml
21 Conference Board of Canada. Research commissioned for the CMA, July 2015.
22 CIHI. Seniors and alternate level of care: building on our knowledge. Available: https://secure.cihi.ca/free_products/ALC_AIB_EN.pdf.
23 CMA. A policy framework to guide a national seniors strategy for Canada. Available: https://www.cma.ca/Assets/assets-library/document/en/about-us/gc2015/policy-framework-to-guide-seniors_en.pdf.
24 Conference Board of Canada. Research commissioned for the CMA, January 2013.
25 CIHI. Seniors and alternate level of care: building on our knowledge. Available: https://secure.cihi.ca/free_products/ALC_AIB_EN.pdf
26 CMA. CMA Submission: The need for health infrastructure in Canada. Available: https://www.cma.ca/Assets/assets-library/document/en/advocacy/Health-Infrastructure_en.pdf.
28 Conference Board of Canada. Research commissioned for the CMA, July 2015.
The Canadian Medical Association (CMA) is the national voice of Canada's doctors, representing more than 83,000 physicians across all regions in the country. With this brief, the CMA provides a portrait of medical practice as small businesses in Canada. A significant proportion of Canada's physicians are self-employed, small business owners, whose medical practices are incorporated as Canadian-Controlled Private Corporations (CCPCs).
Reflecting the significance of the CCPC framework to medical practice in Canada, the CMA strongly supports the federal government's commitment to reduce the small business taxation rate from 11% to 9%. However, the CMA has been concerned with some statements regarding the incorporation of professionals. In response to the federal government's statement, the CMA has received a significant volume of correspondence from its membership; unprecedented in our almost 150 year history.
Presented within this brief are the results of a survey undertaken by the CMA to explore physician incorporation. The survey was distributed to a sample of 25,000 physicians on Dec. 21, 2015 and closed on Jan. 8, 2016 with a response rate of 9%.
Among the key findings of the CMA's survey on incorporation was that more than 8 out of 10 respondents indicated that they were incorporated and reported an average of 2 full-time employees in their professional corporation, including themselves. When part-time employees where included, this increased to an average of 3 employees. Survey respondents confirmed that physician gross (pre-tax) salary is not representative of net salary; where overhead expenses were reported to be 29%, on average, of gross (pre-tax) professional income. Of note, there have been several studies at the provincial level that specifically researched overhead expenses; these studies found average overage expenses to exceed 40% of gross salary.
The results of the CMA's survey confirms that the CCPC framework provides a critical tax equity measure that recognizes the unique challenges they face as small business owners and critical to the operation of the practice model, particularly supporting community-based care. In some cases, the practice model is only economical within this framework. An important fact is that unlike other small business owners, physicians cannot pass on any increases in compliance or operating costs to patients, given the design of Canada's public health care system.
When asked to consider the likelihood of various actions they may take should the federal government alter the CCPC framework, a large majority (75%) of the respondents indicated that they would be very or somewhat likely to take one or more of these actions:
* more than half (54%) of practicing physicians said that they would be very or somewhat likely to reduce the number of hours worked;
* 42% would be very or somewhat likely to reduce office staff; and,
* about one quarter indicated that they would be very or somewhat likely to pursue other measures such as closing their practice and retiring (24%) or relocating their practice to another provincial/territorial jurisdiction (26%) or to the U.S. or another country (22%).
This brief also highlights the policy imperative for extending incorporation to medical professionals. As captured in Ontario's 2000 budget document, it is "to level the playing field with other self-employed individuals who can choose whether to operate their businesses through a corporation".1
Finally, the CMA's core recommendation to the federal government is to maintain tax equity for medical professionals by affirming its commitment to the existing framework governing Canadian-Controlled Private Corporations.
The Canadian Medical Association (CMA) is the national voice of Canada's doctors. The CMA is the voluntary professional organization representing more than 83,000 physicians across all regions in Canada and comprising 12 provincial and territorial medical associations and more than 60 national medical organizations. The CMA's mission is helping physicians care for patients.
The purpose of this brief is to provide an overview of medical practice as small businesses in Canada. As is discussed herein, a significant proportion of Canada's physicians are self-employed, small business owners, whose medical practices are incorporated as Canadian-Controlled Private Corporations (CCPCs). As such, the CMA strongly supports the federal government's commitment to reduce the small business taxation rate from 11% to 9%, as outlined in the mandate letter for the Minister of Small Business and Tourism.2
1) Most Physicians are Small Business Owners
Canada's physicians are highly skilled professionals, providing an important public service and making a significant contribution to the knowledge economy. In light of the design of Canada's health care system, the vast majority of physicians are self-employed professionals operating medical practices as small business owners.
More than 8 out of 10 respondents to the CMA's survey indicated that they were incorporated; 81% indicated that they were incorporated individually while 4% indicated they were incorporated in a group. Nationally, it is estimated that approximately 60% of physicians are incorporated.3
Physician-owned and run medical practices ensure that Canadians are able to access the care they need, as close to their homes as possible. In doing so, Canadian physicians are directly and indirectly responsible for hundreds of thousands of jobs across the country, and invest millions of dollars in local communities.
Respondents to the CMA's survey on incorporation reported an average of 2 full-time employees in their professional corporation, including themselves. When part-time employees where included, this increased to an average of 3 employees. In operating their medical practices, Canada's physicians rent, lease or own office space and further contribute to local economies through municipal taxes on these properties.
Like other self-employed small business owners, physicians typically do not have access to pensions or health benefits. In addition, as employers, physicians are responsible for the provision of payroll taxes and benefits for their employees.
2) Increased Cost-Burden for Canada's Doctors
Canada's physicians face unique, additional financial and personal burdens in owning and operating medical practices in comparison with other small businesses. First, amongst Canada's small business owners4, Canada's physicians are highly skilled and trained professionals. On average, physicians enter the workforce at a later age with significant debt from education. The average age that family physicians enter practice is over 30 years and over 33 years for specialists.5
The 2013 National Physician Survey explored the issue of debt levels. It found that the proportion of medical students expecting debt of $100,000 or more doubled from 15% in 2004 to 30% in 2012.6 Further, a third of medical residents expect debt to be over $100,000 and 19% expect debt to exceed $160,000 before entering practice.7
For Canada's doctors, the high level of education-related debt and the later age they are able to initiate professional earnings represents a significant challenge for personal financial planning, notably retirement planning.
Second, it is not well known that physician gross (pre-tax) salary is not representative of net salary. In addition to the expenses of running a medical practice, such as salaries and rent, physicians have a range of professional fees that are required by regulation to be submitted. According to the respondents to the CMA's survey on incorporation, these overhead expenses were reported to be 29%, on average, of gross (pre-tax) professional income. Of note, there have been several studies at the provincial level that specifically researched overhead expenses; these studies found average overage expenses to exceed 40% of gross salary.8
Finally, unlike most small business owners, as providers within a public health care systems, Canada's physicians cannot pass on any cost increases associated with operating their medical practice. The majority of physician remuneration in Canada is through "fee-for-service" systems9 whereby fees for insured physician services10 are set by the province following negotiations with the provincial medical association. Any increases in the cost of operating a medical practice, including changes in taxation, would be borne by the physician directly, as would the potential additional resource burden incurred in responding to a change to the CCPC regulatory framework. It is not surprising then that one study found that "high-income, self-employed physicians are much more sensitive to the marginal tax rate than would be suggested by previous labor-supply studies".11
The results of the CMA's survey on incorporation with respect to personal financial planning highlight the concerns associated with the unique burdens facing physicians in operating a medical practice. A strong majority (92%) of respondents rated the ability to save for retirement as very important for personal financial planning. A majority (61%) of respondents indicated the ability to pay off debt and half (50%) indicated the ability to manage practice overhead costs as very important for personal financial planning.
3) Role of Incorporation for Ensuring Tax Equity for Medical Professional
As reviewed above, in light of the design of Canada's health care system, the majority of physicians are self-employed professionals and small business owners. Like other small business owners, physicians do not have access to pension and health benefits, despite investing in local communities and providing employment. Unlike other small business owners, physicians commence professional income later in life and carry high debt levels associated with education and training. In light of these significant considerations, the CCPC framework represents a measure of tax equity for Canada's physicians.
In Canada, the 12 jurisdictions have extended the ability to incorporate to medical professionals. As stated in Ontario's 2000 budget document, the underlying policy purpose of extending incorporation to medical professionals is "to level the playing field with other self-employed individuals who can choose whether to operate their businesses through a corporation".12
For self-employed professionals, incorporation offers many well recognized benefits. As highlighted by most taxation guidance, the application to the small business deduction and the ability to retain income in the corporation are significant benefits of incorporation for small businesses.13 For self-employed medical professionals without access to an employer pension or benefits, the ability to retain income in the corporation contributes to retirement and pension planning capabilities. Finally, the CCPC framework allows for income splitting with family members in almost all jurisdictions.
The CMA's survey on incorporation explored the benefits of the CCPC framework. The top rated benefit of incorporation was the ability for professional income to be taxed at the small business taxation rate, with 85% rating it as very important. In comparison, 60% of respondents indicated that income splitting with a family member was very important.
4) Changes to the CCPC Framework and Potential Unintended Consequences
As noted above, the federal government has committed to reducing the small business taxation rate from 11% to 9%. In recognition of the significant financial pressures managed by physicians owning and operating medical practices, the CMA strongly supports this commitment.
However, along with this commitment, the federal government has made concerning statements regarding professionals and the CCPC framework. While the federal government has not indicated a specific measure or timeline, the statements on their own have yielded significant uncertainty and concern. In response to the federal government's statement, the CMA has received a significant volume of correspondence from its membership; unprecedented in our almost 150 year history.
The CMA cannot emphasize enough the need for caution in considering changes to the CCPC framework. The CCPC framework and the ability of incorporated physicians to maintain access to the small business rate is fundamental to the business model for these medical practices. Changes to the framework could have real and far-reaching impacts. Beyond the immediate impact to a physician, employees of a medical practice, and the region the medical practice serves, depending on the scope of changes to the CCPC framework, impacts could be at the health-sector level, particularly in terms of shifting the delivery of care away from institutionalized care toward community-based care.
The physicians surveyed by the CMA were asked to consider the likelihood of various actions they may take should the federal government alter the CCPC framework. A large majority (75%) of the respondents indicated that they would be very or somewhat likely to take one or more of these actions:
* more than half (54%) of practicing physicians said that they would be very or somewhat likely to reduce the number of hours worked;
* 42% would be very or somewhat likely to reduce office staff; and,
* about one quarter indicated that they would be very or somewhat likely to pursue other measures such as closing their practice and retiring (24%) or relocating their practice to another provincial/territorial jurisdiction (26%) or to the U.S. or another country (22%).
The responses to the CMA's survey on incorporation align with the limited research available on this issue. In a study that explored the interprovincial migration of physicians confirmed that "the differences in real income have a positive and significant effect on a physician's decision to migrate from one province to another".14 Another study that explored the impacts of taxation on physicians, noted that "it has been demonstrated in the literature that physicians in higher-tax states work less on average".15 These studies emphasize the potential for unintended consequences should changes to the CCPC framework impact physician medical practice.
As outlined in this brief, the majority of Canada's doctors are self-employed, highly skilled professionals providing a critical health care contribution in communities across the country. For these physicians, the CCPC framework provides a critical tax equity measure that recognizes the unique challenges they face as small business owners. For the vast majority of incorporated physicians, the benefits of the CCPC framework are critical to the operation of the practice model, particularly supporting community-based care. In some cases, the practice model is only economical within this framework.
In light of the intrinsic role of the CCPC framework to medical practice, and therefore the provision of medical care in Canada, the CMA encourages significant caution in considering any potential changes to this framework. The CMA's core recommendation to the federal government is to maintain tax equity for medical professionals by affirming its commitment to the existing framework governing Canadian-Controlled Private Corporations.
1 Ontario Budget 2000 https://www.poltext.org/sites/poltext.org/files/discours/ON/ON_2000_B_37_01.pdf
2 Mandate Letter for the Minister of Small Business and Tourism http://www.pm.gc.ca/eng/minister-small-business-and-tourism-mandate-letter
3 CMA. 2014. Environmental Scan.
4 Industry Canada. Key Small Business Statistics 2013 https://www.ic.gc.ca/eic/site/061.nsf/eng/02814.html
5 Canadian Post M.D. Registry.
6 National Physician Survey http://nationalphysiciansurvey.ca/wp-content/uploads/2013/03/C3PR-Bulletin-StudentResidentDebt-201303-EN.pdf
7 National Physician Survey http://nationalphysiciansurvey.ca/wp-content/uploads/2013/03/C3PR-Bulletin-StudentResidentDebt-201303-EN.pdf
8 Alberta Medical Association. Setting the record straight on physician compensation. https://www.albertadoctors.org/Media%20PLs%202013/Feb1_2013_PL_Backgrounder.pdf and Ontario Medical Association. Payments to physicians and practice overhead expenses: separating facts from fiction in Ontario. https://www.oma.org/resources/documents/paymentsphysicians_pp18-19.pdf. and R.K. House & Associates Ltd. Executive Summary for the British Columbia Medical Association: 2005 Overhead Cost Study.
9 CIHI. Physicians in Canada, 2014: Summary Report. https://secure.cihi.ca/free_products/Summary-PhysiciansInCanadaReport2014_EN-web.pdf
10 Health Canada. Canada Health Act Annual Report 2014-15. http://www.hc-sc.gc.ca/hcs-sss/pubs/cha-lcs/2015-cha-lcs-ar-ra/index-eng.php
11 Mark H. Showalter and Norman K. Thurston. Taxes and labor supply of high-income physicians. Journal of Public Economics 66 (1997) 73-97.
12 Ontario Budget 2000 https://www.poltext.org/sites/poltext.org/files/discours/ON/ON_2000_B_37_01.pdf
13 Manulife. The Professional's Option - Professional Incorporation. https://repsourcepublic.manulife.com/wps/wcm/connect/02b56600433c4887b94dff319e0f5575/ins_tepg_taxtopicproopt.pdf?MOD=AJPERES&CACHEID=02b56600433c4887b94dff319e0f5575
14 Michael Benarroch and Hugh Grant. The interprovincial migration of Canadian physicians: does income matter? Applied Economics, 2004, 36, 2335-2345.
15 Norman K. Thurston and Anne M. Libby. Taxes and Physicians Use of Ancillary Health Labor. The Journal of Human Resources, XXXV 2.
Thank you Mr. Chair.
I am Dr. Jeff Blackmer, the Vice-President of Medical Professionalism for the Canadian Medical Association.
On behalf of the CMA, let me first commend the committee for initiating an emergency study on this public health crisis in Canada.
As the national organization representing over 83,000 Canadian physicians, the CMA has an instrumental role in collaborating with other health stakeholders, governments and patient organizations in addressing the opioid crisis in Canada.
On behalf of Canada’s doctors, the CMA is deeply concerned with the escalating public health crisis related to problematic opioid and fentanyl use.
Physicians are on the front lines in many respects.
Doctors are responsible for supporting patients with the management of acute and chronic pain. Policy makers must recognize that prescription opioids are an essential tool in the alleviation of pain and suffering, particularly in palliative and cancer care.
The CMA has long been concerned with the harms associated with opioid use. In fact, we appeared before this committee as part of its 2013 study on the government’s role in addressing prescription drug abuse.
At that time, we made a number of recommendations on the government’s role – some of which I will reiterate today.
Since then, the CMA has taken numerous actions to contribute to Canada’s response to the opioid crisis.
These actions have included advancing the physician perspective in all active government consultations.
In addition to the 2013 study by the health committee, we have also participated in the 2014 ministerial roundtable and recent regulatory consultations led by Health Canada — specifically, on tamper resistant technology for drugs and delisting of naloxone for the prevention of overdose deaths in the community.
Our other actions have included:
· Undertaking physician polling to better understand physician experiences with prescribing opioids;
· Developing and disseminating new policy on addressing the harms associated with opioids;
· Supporting the development of continuing medical education resources and tools for physicians;
· Supporting the national prescription drug drop off days; and,
· Hosting a physician education session as part of our annual meeting in 2015.
Further, I’m pleased to report that the CMA has recently joined the Executive Council of the First Do No Harm strategy, coordinated by the Canadian Centre on Substance Abuse.
In addition, we have joined 7 leading stakeholders as part of a consortium formed this year to collaborate on addressing the issue from a medical standpoint.
I will now turn to the CMA’s recommendations for the committee’s consideration. These are grouped in four major theme areas.
1) Harm Reduction
The first of them is harm reduction.
Addiction should be recognized and treated as a serious, chronic and relapsing medical condition for which there are effective treatments.
Despite the fact that there is broad recognition that we are in a public health crisis, the focus of the federal National Anti-Drug Strategy is heavily skewed towards a criminal justice approach rather than a public health approach.
In its current form, this strategy does not significantly address the determinants of drug use, treat addictions, or reduce the harms associated with drug use.
The CMA strongly recommends that the federal government review the National Anti-Drug Strategy to reinstate harm reduction as a core pillar.
Supervised consumption sites are an important part of a harm reduction program that must be considered in an overall strategy to address harms from opioids. The availability of supervised consumption sites is still highly limited in Canada.
The CMA maintains its concerns that the new criteria established by the Respect for Communities Act are overly burdensome and deter the establishment of new sites.
As such, the CMA continues to recommend that the act be repealed or at the least, significantly amended.
2) Expanding Pain Management and Addiction Treatment
The second theme area I will raise is the need to expand treatment options and services.
Treatment options and services for both addiction as well as pain management are woefully under-resourced in Canada.
This includes substitution treatments such as buprenorphine-naloxone as well as services that help patients taper off opioids or counsel them with cognitive behavioural therapy.
Availability and access of these critical resources varies by jurisdiction and region. The federal government should prioritize the expansion of these services.
The CMA recommends that the federal government deliver additional funding on an emergency basis to significantly expand the availability and access to addiction treatment and pain management services.
3) Investing in Prescriber and Patient Education
The third theme I will raise for the committee’s consideration is the need for greater investment in both prescriber as well as patient education resources.
For prescribers, this includes continuing education modules as well as training curricula. We need to ensure the availability of unbiased and evidenced-based educational programs in opioid prescribing, pain management and in the management of addictions.
Further, support for the development of educational tools and resources based on the new clinical guidelines to be released in early 2017 will have an important role.
Finally, patient and public education on the harms associated with opioid usage is critical.
As such, the CMA recommends that the federal government deliver new funding to support the availability and provision of education and training resources for prescribers, patients and the public.
4) Establishing a Real-time Prescription Monitoring Program
Finally, to support optimal prescribing, it is critical that prescribers be provided with access to a real-time prescription monitoring program.
Such a program would allow physicians to review a patient’s prescription history from multiple health services prior to prescribing. Real-time prescription monitoring is currently only available in two jurisdictions in Canada.
Before closing, I must emphasize that the negative impacts associated with prescription opioids represent a complex issue that will require a multi-faceted, multi-stakeholder response.
A key challenge for public policy makers and prescribers is to mitigate the harms associated with prescription opioid use, without negatively affecting patient access to the appropriate treatment for their clinical conditions.
To quote a past CMA president: “the unfortunate reality is that there is no silver bullet solution and no one group or government can address this issue alone”.
The CMA is committed to being part of the solution.